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Here's Why Adamas Pharmaceuticals' Stock Soared Today

The pharma's stock roared higher today after the company announced that its experimental treatment for levodopa-induced dyskinesia in patients with Parkinson’s disease met its primary endpoint in a late-stage study.

What: Adamas Pharmaceuticals(NASDAQ:ADMS), a specialty pharmaceutical company developing treatments for chronic disorders of the central nervous system, saw its shares climb by more than 55% Wednesday on sky-high volume after the company announced that its lead experimental product, ADS-5102, met its primary endpoint of reducing levodopa-induced dyskinesia (LID) associated with Parkinson's disease in a late-stage study.

So what: The Street presently has ADS-5102's peak sales ranging from $200 million to $500 million if the drug is eventually approved as a treatment for LID. Although this wide range implies a high level of uncertainty over the drug's commercial potential, Adamas only sports a market cap of around $480 million, meaning that ADS-5102 shouldn't even need to reach the higher end of these projections to be a major value driver for the company moving forward.

Now what: Per the press release, Adamas is now planning on approaching the U.S. Food and Drug Administration about filing for the drug's approval in the near future, putting it on track to become the first approved treatment for LID in the U.S., according to the company. However, the main reason there is so much uncertainty surrounding ADS-5102's commercial potential is because there are a handful of other experimental treatments in development for LID right now. As such, investors may want to keep a close eye on the clinical progress of these potential competitive threats.

Author

George Budwell has been writing about healthcare and biotechnology companies at the Motley Fool since 2013. His primary interests are novel small molecule drugs, next generation vaccines, and cell therapies.